The Avalon Project : S 1493 Small Business Leads to Economic Recovery Act of 2001 (Introduced in the Senate); October 3, 2001

September 11, 2001 : Attack on America
S 1493 Small Business Leads to Economic Recovery Act of 2001 (Introduced in the Senate); October 3, 2001

Small Business Leads to Economic Recovery Act of 2001 (Introduced in the Senate)

S 1493 IS

107th CONGRESS

1st Session

S. 1493

To forgive interest payments for a 2-year period on certain disaster loans to small business concerns in the aftermath of the terrorist attacks perpetrated against the United States on September 11, 2001, to amend the Internal Revenue Code of 1986 to provide tax relief for small business concerns, and for other purposes.

IN THE SENATE OF THE UNITED STATES

October 3, 2001

Mr. BOND introduced the following bill; which was read twice and referred to the Committee on Finance

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A BILL

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Small Business Leads to Economic Recovery Act of 2001'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--SMALL BUSINESS EMERGENCY LOAN ASSISTANCE

Sec. 101. Short title.

Sec. 102. Definitions.

Sec. 103. Deferment of disaster loan payments.

Sec. 104. Refinancing existing disaster loans.

Sec. 105. Emergency relief loan program.

Sec. 106. Economic recovery loan and financing programs.

TITLE II--SMALL BUSINESS TAX PROVISIONS FOR ECONOMIC STIMULUS

Sec. 201. Amendment of 1986 Code.

Sec. 202. Increase in expense treatment of certain depreciable business assets for small businesses.

Sec. 203. Expensing of computer software.

Sec. 204. Modification of depreciation rules for computers and software.

Sec. 205. Adjustments to depreciation limits for business vehicles.

Sec. 206. Increased deduction for business meal expenses.

Sec. 207. Modification of unrelated business income limitation on investment in certain debt-financed properties.

Sec. 208. Repeal of alternative minimum tax on individuals.

Sec. 209. Exemption from alternative minimum tax for small corporations.

TITLE III--SMALL BUSINESS PROCUREMENTS

Sec. 301. Expansion of opportunity for small businesses to be awarded department of defense contracts for architectural and engineering services and construction design.

Sec. 302. Procurements of property and services in amounts not in excess of $100,000 from small businesses.

Sec. 303. Sole source procurements of property and services under the 2001 Emergency Supplemental Appropriations Act for Recovery From and Response To Terrorist Attacks on the United States.

TITLE I--SMALL BUSINESS EMERGENCY LOAN ASSISTANCE

SEC. 101. SHORT TITLE.

This title may be cited as the `Small Business Emergency Loan Assistance Act of 2001'.

SEC. 102. DEFINITIONS.

In this title--

(1) the term `Administration' means the Small Business Administration;

(2) the term `covered loan' means a loan made by the Administration to a small business concern--

(A) under section 7(b) of the Small Business Act (15 U.S.C. 636(b)); and

(B) located in an area which the President has designated as a disaster area as a result of the terrorist attacks perpetrated against the United States on September 11, 2001; and

(3) the term `small business concern' has the same meaning as in section 3 of the Small Business Act (15 U.S.C. 632).

SEC. 103. DEFERMENT OF DISASTER LOAN PAYMENTS.

(a) IN GENERAL- Notwithstanding any other provision of law, payments of principal or interest on a covered loan shall be deferred, and no interest shall accrue with respect to a covered loan, during the 2-year period following the date of issuance of the covered loan.

(b) RESUMPTION OF PAYMENTS- At the end of the 2-year period described in subsection (a), the payment of periodic installments of principal and interest shall be required with respect to a covered loan, in the same manner and subject to the same terms and conditions as would otherwise be applicable to a loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)).

SEC. 104. REFINANCING EXISTING DISASTER LOANS.

(a) IN GENERAL- Any loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)) that was outstanding as to principal or interest on September 11, 2001, may be refinanced by a small business concern that is also eligible to receive a covered loan under this Act, and the refinanced amount shall be considered to be part of the covered loan for purposes of this title.

(b) NO AFFECT ON ELIGIBILITY- A refinancing under subsection (a) by a small business concern shall be in addition to any covered loan eligibility for that small business concern under this title.

SEC. 105. EMERGENCY RELIEF LOAN PROGRAM.

(a) BUSINESS LOAN AUTHORITY- Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following:

`(31) TEMPORARY LOAN AUTHORITY FOLLOWING TERRORIST ATTACKS-

`(A) IN GENERAL- During the 1-year period beginning on the date of enactment of this paragraph, the Administration may make loans under this subsection to a small business concern that has suffered, or that is likely to suffer, significant economic injury as a result of the terrorist attacks perpetrated against the United States on September 11, 2001.

`(B) LOAN TERMS- With respect to a loan under this paragraph--

`(i) for purposes of paragraph (2)(A), participation by the Administration shall be equal to 95 percent of the balance of the financing outstanding at the time of disbursement of the loan;

`(ii) no fee may be required or charged under paragraph (18);

`(iii) the applicable rate of interest shall not exceed a rate that is one percentage point above the prime rate as published in a national financial newspaper published each business day;

`(iv) no such loan shall be made if the total amount outstanding and committed (by participation or otherwise) to the borrower under this paragraph would exceed $1,000,000;

`(v) upon request of the borrower, repayment of principal due on a loan made under this paragraph shall be deferred during the 1-year period beginning on the date of issuance of the loan; and

`(vi) the repayment period shall not exceed 7 years, including any period of deferment under clause (v).

`(C) APPLICABILITY- The loan terms described in subparagraph (B) shall apply to a loan under this paragraph notwithstanding any other provision of this subsection, and except as specifically provided in this paragraph, a loan under this paragraph shall otherwise be subject to the same terms and conditions as any other loan under this subsection.

`(D) SIGNIFICANT ECONOMIC INJURY- In this paragraph, the term `substantial economic injury' means an economic harm to a small business concern that results in the inability of the small business concern--

`(i) to meet its obligations as they mature;

`(ii) to pay its ordinary and necessary operating expenses; or

`(iii) to market, produce, or provide a product or service ordinarily marketed, produced, or provided by the business concern.'.

SEC. 106. ECONOMIC RECOVERY LOAN AND FINANCING PROGRAMS.

(a) One-Year Suspension of Section 7(a) FEES- Section 7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18)) is amended by adding at the end the following:

`(C) ONE-YEAR WAIVER OF FEES FOLLOWING TERRORIST ATTACKS- No fee may be collected or charged, and no fee shall accrue under this paragraph during the 1-year period beginning on the date of enactment of the Small Business Terrorism Relief and Economic Stimulus Act of 2001.'.

(b) ONE-YEAR INCREASE IN PARTICIPATION LEVELS- Section 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is amended--

(1) in subparagraph (A), by striking `subparagraph (B)' and inserting `subparagraphs (B) and (E)'; and

(2) by adding at the end the following:

`(E) TEMPORARY PARTICIPATION LEVELS FOLLOWING TERRORIST ATTACKS- During the 1-year period beginning on the date of enactment of the Small Business Terrorism Relief and Economic Stimulus Act of 2001, clauses (i) and (ii) of subparagraph (A) shall be construed to read as follows:

`(i) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or

`(ii) 90 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000.'.'.

(c) One-Year Suspension of Other Fees- Section 503 of the Small Business Investment Act of 1958 (15 U.S.C. 697) is amended--

(1) in subsection (b)(7)(A), by striking `which amount shall' and inserting `which amount shall not be assessed or collected, and no amount shall accrue, during the 1-year period beginning on the date of enactment of the Small Business Terrorism Relief and Economic Stimulus Act of 2001, and which amount shall otherwise'; and

(2) in subsection (d)(2), by adding at the end the following: `No fee may be assessed or collected under this paragraph, and no fee shall accrue, during the 1-year period beginning on the date of enactment of the Small Business Terrorism Relief and Economic Stimulus Act of 2001.'.

TITLE II--SMALL BUSINESS TAX PROVISIONS FOR ECONOMIC STIMULUS

SEC. 201. AMENDMENT OF 1986 CODE.

Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

SEC. 202. INCREASE IN EXPENSE TREATMENT OF CERTAIN DEPRECIABLE BUSINESS ASSETS FOR SMALL BUSINESSES.

(a) IN GENERAL- Section 179(b)(1) (relating to dollar limitation) is amended to read as follows:

`(1) DOLLAR LIMITATION-

`(A) IN GENERAL- The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $100,000.

`(B) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2001, the dollar amount contained in

subparagraph (A) shall be increased by an amount equal to--

`(i) such dollar amount, multiplied by

`(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2000' for `calendar year 1992' in subparagraph (B) thereof.

If any amount as adjusted under this subparagraph is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.'.

(b) EXPANSION OF PHASE-OUT OF LIMITATION- Section 179(b)(2) is amended to read as follows:

`(2) REDUCTION IN LIMITATION-

`(A) IN GENERAL- The limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property for which a deduction is allowable (without regard to this subsection) under subsection (a) for such taxable year exceeds $500,000.'

`(B) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2001, the dollar amount contained in subparagraph (A) shall be increased by an amount equal to--

`(i) such dollar amount, multiplied by

If any amount as adjusted under this subparagraph is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.'.

(c) TIME OF DEDUCTION- The second sentence of section 179(a) (relating to election to expense certain depreciable business assets) is amended by inserting `(or, if the taxpayer elects, the preceding taxable year if the property was purchased in such preceding year)' after `service'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 203. EXPENSING OF COMPUTER SOFTWARE.

(a) COMPUTER SOFTWARE ELIGIBLE FOR EXPENSING- The heading and first sentence of section 179(d)(1) (relating to section 179 property) are amended to read as follows:

`(1) SECTION 179 PROPERTY- For purposes of this section, the term `section 179 property' means property--

`(A) which is--

`(i) tangible property to which section 168 applies, or

`(ii) computer software (as defined in section 197(e)(3)(B)) to which section 167 applies,

`(B) which is section 1245 property (as defined in section 1245(a)(3)), and

`(C) which is acquired by purchase for use in the active conduct of a trade or business.'.

(b) No Computer Software Included as Section 197 Intangible-

(1) IN GENERAL- Section 197(e)(3)(A) is amended to read as follows:

`(A) IN GENERAL- Any computer software.'.

(2) CONFORMING AMENDMENT- Section 167(f)(1)(B) is amended by striking `; except that such term shall not include any such software which is an amortizable section 197 intangible'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2000.

SEC. 204. MODIFICATION OF DEPRECIATION RULES FOR COMPUTERS AND SOFTWARE.

(a) 2-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF COMPUTERS AND PERIPHERAL EQUIPMENT-

(1) IN GENERAL- Section 168(c) (relating to applicable recovery period) is amended by adding at the end the following flush sentence:

`In the case of 5-year property which is a computer or peripheral equipment, the applicable recovery period shall be 2 years.'.

(2) CONFORMING AMENDMENTS-

(A) Section 168(g)(3)(C) (relating to alternative depreciation system for certain property) is amended to read as follows:

`(C) QUALIFIED TECHNOLOGICAL EQUIPMENT-

`(i) IN GENERAL- Except as provided in clause (ii), in the case of any qualified technological equipment, the recovery period used for purposes of paragraph (2) shall be 5 years.

`(ii) COMPUTERS OR PERIPHERAL EQUIPMENT- In the case of any computer or peripheral equipment, the recovery period used for purposes of paragraph (2) shall be 2 years.'.

(B) Section 168(j)(2) (relating to depreciation of property on Indian reservations) is amended by adding at the end the following flush sentence:

`In the case of 5-year property which is a computer or peripheral equipment, the applicable recovery period shall be 1 year.'.

(C) Section 467(e)(3)(A) (relating to certain payments for the use of property or services) is amended by adding at the end the following flush sentence:

`In the case of 5-year property which is a computer or peripheral equipment, the applicable recovery period shall be 2 years.'.

(b) 2-YEAR DEPRECIATION PERIOD FOR COMPUTER SOFTWARE- Section 167(f)(1)(A) of the Internal Revenue Code of 1986 is amended by striking `36 months' and inserting `24 months'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2000.

SEC. 205. ADJUSTMENTS TO DEPRECIATION LIMITS FOR BUSINESS VEHICLES.

(a) IN GENERAL-

(1) INCREASE IN LIMITATION- Section 280F(a)(1)(A) (relating to limitation on amount of depreciation for luxury automobiles) is amended--

(A) by striking `$2,560' in clause (i) and inserting `$5,400';

(B) by striking `$4,100' in clause (ii) and inserting `$8,500';

(D) by striking `$1,475' in clause (iv) and inserting `$3,000'.

(2) CONFORMING AMENDMENT- Section 280F(a)(1)(B)(ii) (relating to disallowed deductions allowed for years after recovery period) is amended by striking `$1,475' each place that it appears and inserting `$3,000'.

(b) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2000.

SEC. 206. INCREASED DEDUCTION FOR BUSINESS MEAL EXPENSES.

(a) IN GENERAL- Section 274(n)(1) (relating to only 50 percent of meal and entertainment expenses allowed as deduction) is amended by striking `50 percent' in the text and inserting `the allowable percentage'.

(b) ALLOWABLE PERCENTAGE- Section 274(n) is amended by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively, and by inserting after paragraph (1) the following new paragraph:

`(2) ALLOWABLE PERCENTAGE- For purposes of paragraph (1), the allowable percentage is--

`(A) in the case of amounts for items described in paragraph (1)(B), 50 percent, and

`(B) in the case of expenses for food or beverages, 100 percent.'.

(c) CLARIFICATION OF SPECIAL RULE FOR INDIVIDUALS SUBJECT TO FEDERAL HOURS OF SERVICE- Section 274(n)(4) (relating to limited percentages of meal and entertainment expenses allowed as deduction), as redesignated by subsection (b), is amended to read as follows:

`(4) SPECIAL RULE FOR INDIVIDUALS SUBJECT TO FEDERAL HOURS OF SERVICE- In the case of any expenses for food or beverages consumed while away from home (within the meaning of section 162(a)(2)) by an individual during, or incident to, the period of duty subject to the hours of service limitations of the Department of Transportation, paragraph (2)(B) shall apply to such expenses.'.

(d) CONFORMING AMENDMENT- The heading for subsection (n) of section 274 is amended by striking `50 PERCENT' and inserting `LIMITED PERCENTAGES'.

(e) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 207. MODIFICATION OF UNRELATED BUSINESS INCOME LIMITATION ON INVESTMENT IN CERTAIN DEBT-FINANCED PROPERTIES.

(a) IN GENERAL- Section 514(c)(6) (relating to acquisition indebtedness) is amended--

(1) by striking `include an obligation' and inserting `include--

`(A) an obligation',

(2) by striking the period at the end and inserting `, or', and

(3) by adding at the end the following:

`(B) indebtedness incurred by a small business investment company licensed under the Small Business Investment Act of 1958 which is evidenced by a debenture--

`(i) issued by such company under section 303(a) of such Act, or

`(ii) held or guaranteed by the Small Business Administration.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to acquisitions made on or after the date of the enactment of this Act.

SEC. 208. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDIVIDUALS.

(a) IN GENERAL-

(1) REPEAL- Section 55(a) (relating to alternative minimum tax) is amended by adding at the end the following new flush sentence:

`For purposes of this title, the tentative minimum tax on any taxpayer other than a corporation for any taxable year beginning after December 31, 2000, shall be zero.'.

(2) NONREFUNDABLE PERSONAL CREDITS FULLY ALLOWED AGAINST REGULAR TAX LIABILITY-

(A) IN GENERAL- Section 26(a) (relating to limitation based on amount of tax) is amended to read as follows:

`(a) LIMITATION BASED ON AMOUNT OF TAX- The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the taxpayer's regular tax liability for the taxable year.'.

(B) CHILD CREDIT- Section 24(d) is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2).

(b) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 209. EXEMPTION FROM ALTERNATIVE MINIMUM TAX FOR SMALL CORPORATIONS.

(a) IN GENERAL- Section 55(e)(1)(A) (relating to exemption for small corporations) is amended to read as follows:

`(A) $10,000,000 gross receipts test- The tentative minimum tax of a corporation shall be zero for any taxable year if the corporation's average annual gross receipts for all 3-taxable-year periods ending before such taxable year does not exceed $10,000,000. For purposes of the preceding sentence, only taxable years beginning after December 31, 1997, shall be taken into account.'.

(b) Gross Receipts Test for First 3-Year Period- Section 55(e)(1)(B) is amended to read as follows:

`(B) $7,500,000 gross receipts test for first 3-year period- Subparagraph (A) shall be applied by substituting `$7,500,000' for `$10,000,000' for the first 3-taxable-year period (or portion thereof) of the corporation which is taken into account under subparagraph (A).'.

TITLE III--SMALL BUSINESS PROCUREMENTS

SEC. 301. EXPANSION OF OPPORTUNITY FOR SMALL BUSINESSES TO BE AWARDED DEPARTMENT OF DEFENSE CONTRACTS FOR ARCHITECTURAL AND ENGINEERING SERVICES AND CONSTRUCTION DESIGN.

Section 2855(b)(2) of title 10, United States Code, is amended by striking `$85,000' and inserting `$300,000'.

SEC. 302. PROCUREMENTS OF PROPERTY AND SERVICES IN AMOUNTS NOT IN EXCESS OF $100,000 FROM SMALL BUSINESSES.

(a) SMALL BUSINESS SET-ASIDES- Section 15 of the Small Business Act (15 U.S.C. 644) is amended by adding at the end the following:

`(q) PROCUREMENTS OF PROPERTY AND SERVICES NOT IN EXCESS OF $100,000-

`(1) FEDERAL SUPPLY SCHEDULE ITEMS- The head of an agency procuring items listed on a Federal Supply Schedule in a total amount not in excess of $100,000 shall procure the items from a small business.

`(2) OTHER PROPERTY AND SERVICES- The head of an agency procuring property or services not listed on a Federal Supply Schedule in a total amount not in excess of $100,000 shall procure the property or services from a small business registered on PRO-Net or the Centralized Contractor Registration System. Competitive procedures shall be used in the selection of sources for procurements from small businesses under this subsection.'.

(b) PHASED IMPLEMENTATION-

(1) FIRST 2 YEARS- During the 2-year period beginning on the effective date determined under subsection (c), the requirement of subsection (q)(1) of section 15 of the Small Business Act (as added by subsection (a) of this section) shall apply with respect to 25 percent of the procurements described in that subsection (determined on the basis of amount), and the requirement in subsection (q)(2) of that section shall apply with respect to 25 percent of the procurements described in subsection (q)(2) (determined on the basis of amount).

(2) ENSUING 2 YEARS- During the 2-year period beginning on the day after the expiration of the period described in paragraph (1), the requirement of subsection (q)(1) of section 15 of the Small Business Act (as added by subsection (a) of this section) shall apply with respect to 50 percent of the procurements described in that subsection (determined on the basis of amount), and the requirement in subsection (q)(2) of that section shall apply with respect to 50 percent of the procurements described in subsection (q)(2) (determined on the basis of amount).

(c) EFFECTIVE DATE- Section 15(q) of the Small Business Act (as added by subsection (a) of this section) shall take effect on the first day of the first month that begins not less than 180 days after the date of enactment of this Act.

SEC. 303. SOLE SOURCE PROCUREMENTS OF PROPERTY AND SERVICES UNDER THE 2001 EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT FOR RECOVERY FROM AND RESPONSE TO TERRORIST ATTACKS ON THE UNITED STATES.

Notwithstanding the provisions of sections 8(a)(1)(D)(i)(II) and subclauses (I) and (II) of section 31(b)(2)(A)(ii)( of the Small Business Act (15 U.S.C. 637(a)(1)(D)(i)(II), 658(b)(2)(A)(ii)(I), and 658 (b)(2)(A)(ii)(II), respectively), a contracting officer may award non-competitive contracts with the budget authority provided by the 2001 Emergency Supplemental Appropriations Act for Recovery From and Response To Terrorist Attacks on the United States (Public Law 107-38) or by subsequent emergency appropriations bill adopted pursuant thereto, if--

(1) such contracts are to be awarded to an eligible Program Participant under section 8(a) or to a qualified HUBZone small business concern under section 3(p)(5) of the Small Business Act (15 U.S.C. 637(a) and 632(p)(5)), and

(2) the head of the procuring agency certifies that the property or services needed by the agency are of such an unusual and compelling urgency that the United States would be seriously harmed by use of competitive procedures, pursuant to--

(A) section 2304(c)(2) of title 10, United States Code, or

(B) section 303(c)(2) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)(2)).

Source:
U.S. Government Website

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